Economics
New submissions
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New submissions for Thu, 28 Mar 24
- [1] arXiv:2403.18185 [pdf, ps, other]
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Title: Learning Optimal Behavior Through Reasoning and ExperiencesSubjects: Theoretical Economics (econ.TH)
We develop a novel framework of bounded rationality under cognitive frictions that studies learning over optimal behavior through both deliberative reasoning and accumulated experiences. Using both types of information, agents engage in Bayesian non-parametric estimation of the unknown action value function. Reasoning signals are produced internally through mental deliberation, subject to a cognitive cost. Experience signals are the observed utility outcomes at previous actions. Agents' subjective estimation uncertainty, which evolves through information accumulation, modulates the two modes of learning in a state- and history-dependent way. We discuss how the model draws on and bridges conceptual, methodological and empirical insights from both economics and the cognitive sciences literature on reinforcement learning.
- [2] arXiv:2403.18248 [pdf, other]
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Title: Statistical Inference of Optimal Allocations I: Regularities and their ImplicationsSubjects: Econometrics (econ.EM); Machine Learning (stat.ML)
In this paper, we develp a functional differentiability approach for solving statistical optimal allocation problems. We first derive Hadamard differentiability of the value function through a detailed analysis of the general properties of the sorting operator. Central to our framework are the concept of Hausdorff measure and the area and coarea integration formulas from geometric measure theory. Building on our Hadamard differentiability results, we demonstrate how the functional delta method can be used to directly derive the asymptotic properties of the value function process for binary constrained optimal allocation problems, as well as the two-step ROC curve estimator. Moreover, leveraging profound insights from geometric functional analysis on convex and local Lipschitz functionals, we obtain additional generic Fr\'echet differentiability results for the value functions of optimal allocation problems. These compelling findings motivate us to study carefully the first order approximation of the optimal social welfare. In this paper, we then present a double / debiased estimator for the value functions. Importantly, the conditions outlined in the Hadamard differentiability section validate the margin assumption from the statistical classification literature employing plug-in methods that justifies a faster convergence rate.
- [3] arXiv:2403.18503 [pdf, other]
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Title: Distributional Treatment Effect with Finite MixtureAuthors: Myungkou ShinSubjects: Econometrics (econ.EM)
Treatment effect heterogeneity is of a great concern when evaluating the treatment. However, even with a simple case of a binary treatment, the distribution of treatment effect is difficult to identify due to the fundamental limitation that we cannot observe both treated potential outcome and untreated potential outcome for a given individual. This paper assumes a finite mixture model on the potential outcomes and a vector of control covariates to address treatment endogeneity and imposes a Markov condition on the potential outcomes and covariates within each type to identify the treatment effect distribution. The mixture weights of the finite mixture model are consistently estimated with a nonnegative matrix factorization algorithm, thus allowing us to consistently estimate the component distribution parameters, including ones for the treatment effect distribution.
- [4] arXiv:2403.18521 [pdf, ps, other]
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Title: Redirecting Flows -- Navigating the Future of the AmazonComments: 38 pages, 11 figuresSubjects: General Economics (econ.GN)
The Amazon Basin, and the Latin America and Caribbean (LAC) region more broadly, stands at a critical juncture, grappling with pressing environmental challenges while holding immense potential for transformative change through innovative solutions. This report illuminates the diverse landscape of social-ecological issues, technological advancements, community-led initiatives, and strategic actions that could help foster biosphere-based sustainability and resilience across the region.
- [5] arXiv:2403.18694 [pdf, ps, other]
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Title: Designing Simple MechanismsAuthors: Shengwu LiSubjects: Theoretical Economics (econ.TH)
Which mechanisms are simple to play? When is it easy for participants to see that a mechanism is incentive-compatible? I will start by explaining how and why economists came to ask these questions. Then I will discuss three recent answers, that capture different aspects of what makes a mechanism simple.
Cross-lists for Thu, 28 Mar 24
- [6] arXiv:2403.18086 (cross-list from cs.GT) [pdf, ps, other]
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Title: Generalizing Better Response Paths and Weakly Acyclic GamesSubjects: Computer Science and Game Theory (cs.GT); Theoretical Economics (econ.TH)
Weakly acyclic games generalize potential games and are fundamental to the study of game theoretic control. In this paper, we present a generalization of weakly acyclic games, and we observe its importance in multi-agent learning when agents employ experimental strategy updates in periods where they fail to best respond. While weak acyclicity is defined in terms of path connectivity properties of a game's better response graph, our generalization is defined using a generalized better response graph. We provide sufficient conditions for this notion of generalized weak acyclicity in both two-player games and $n$-player games. To demonstrate that our generalization is not trivial, we provide examples of games admitting a pure Nash equilibrium that are not generalized weakly acyclic. The generalization presented in this work is closely related to the recent theory of satisficing paths, and the counterexamples presented here constitute the first negative results in that theory.
- [7] arXiv:2403.18166 (cross-list from eess.SY) [pdf, other]
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Title: Incentive-Compatible Vertiport Reservation in Advanced Air Mobility: An Auction-Based ApproachComments: 26 pages, 2 figures, 1 tableSubjects: Systems and Control (eess.SY); Multiagent Systems (cs.MA); Theoretical Economics (econ.TH); Optimization and Control (math.OC)
The rise of advanced air mobility (AAM) is expected to become a multibillion-dollar industry in the near future. Market-based mechanisms are touted to be an integral part of AAM operations, which comprise heterogeneous operators with private valuations. In this work, we study the problem of designing a mechanism to coordinate the movement of electric vertical take-off and landing (eVTOL) aircraft, operated by multiple operators each having heterogeneous valuations associated with their fleet, between vertiports, while enforcing the arrival, departure, and parking constraints at vertiports. Particularly, we propose an incentive-compatible and individually rational vertiport reservation mechanism that maximizes a social welfare metric, which encapsulates the objective of maximizing the overall valuations of all operators while minimizing the congestion at vertiports. Additionally, we improve the computational tractability of designing the reservation mechanism by proposing a mixed binary linear programming approach that is based on constructing network flow graph corresponding to the underlying problem.
Replacements for Thu, 28 Mar 24
- [8] arXiv:2206.01114 (replaced) [pdf, other]
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Title: Coarse Wage-Setting and Behavioral FirmsAuthors: Germán ReyesComments: JEL Codes: D22, E24, D91Subjects: General Economics (econ.GN)
- [9] arXiv:2210.09426 (replaced) [pdf, other]
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Title: Party On: The Labor Market Returns to Social Networks in AdolescenceSubjects: Econometrics (econ.EM)
- [10] arXiv:2306.11376 (replaced) [pdf, other]
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Title: Coevolution of cognition and cooperation in structured populations under reinforcement learningComments: 10 pages, 2 figuresSubjects: Physics and Society (physics.soc-ph); Computer Science and Game Theory (cs.GT); Multiagent Systems (cs.MA); General Economics (econ.GN)
- [11] arXiv:2403.07236 (replaced) [pdf, other]
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Title: Partial Identification of Individual-Level Parameters Using Aggregate Data in a Nonparametric Binary Outcome ModelAuthors: Sarah MoonSubjects: Econometrics (econ.EM); Methodology (stat.ME)
- [12] arXiv:2403.15198 (replaced) [pdf, ps, other]
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Title: On the Weighted Top-Difference Distance: Axioms, Aggregation, and ApproximationComments: 64 pagesSubjects: Computer Science and Game Theory (cs.GT); Discrete Mathematics (cs.DM); Theoretical Economics (econ.TH); Methodology (stat.ME)
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